Employment rules · 10 min read · Updated October 2026
End of service paid monthly: the four schemes that replace the gratuity, compared
How the monthly end of service schemes of Bahrain, the UAE, the Dubai International Financial Centre and Oman work: who each covers, the rates, the years before it, how the employee is paid and what changes in payroll each month.
How do the schemes that pay end of service monthly work in the Gulf?
Four schemes replace the end of service lump sum with monthly payments into a fund. In Bahrain, since March 2024, you pay SIO 4.2% of an expatriate's wage for the first three years, then 8.4%. MOHRE's Savings Scheme in the UAE is optional. The DIFC requires DEWS or another qualifying scheme. Both take 5.83% of basic pay for five years, then 8.33%. Oman's, at 9% of basic pay, starts by 19 July 2027. Years before each scheme keep the gratuity.
See the four schemes side by side
A gratuity is a sum owed when employment ends, worked out then on the last pay. A monthly scheme pays a share of each month's pay into a fund as the service is worked. Bahrain, the UAE and the DIFC run one now. Oman's starts by 19 July 2027 at the latest.
| Scheme | Who it covers | Paid in each month | On what pay | Since |
|---|---|---|---|---|
| Bahrain, through SIO | Every non-Bahraini employee in the private sector, except a national of another Gulf country and the groups the Social Insurance Law leaves out | 4.2% for the first three years of service with you, then 8.4%. You pay it all | Basic pay plus any social allowance | 1 March 2024, compulsory |
| The UAE, MOHRE's Savings Scheme | The employees you enrol, in the private sector or a free zone: all of them, a group, or chosen job categories | 5.83% until five years' service, then 8.33% | Basic pay | Optional, from the day you join |
| The DIFC, through DEWS or another qualifying scheme | Every employee under the DIFC Employment Law, except an Emirati national or other Gulf national registered with GPSSA and a few others the law exempts | 5.83% for the first five years, then 8.33% | Basic pay, counted as at least 50% of the monthly wage | 1 February 2020, compulsory |
| Oman, the Social Protection Fund's savings scheme | Every non-Omani employee | 9%, whatever the service | Basic pay | A date the Fund's board sets, by 19 July 2027 at the latest |
Each replaces the gratuity for the service it covers. The years before it keep the gratuity, settled as the next section sets out.
Settle the years before each scheme on the right terms
The service before a scheme is still a sum you owe. Each scheme says how it is settled.
| Scheme | The years before it |
|---|---|
| Bahrain | They stay under the Labour Law. You pay them when employment ends, on the last basic pay plus any social allowance |
| The UAE's Savings Scheme | You work out and settle the gratuity built up before enrolment, under the Labour Law |
| The DIFC | For an employee already with you on 1 February 2020, the DIFC's own gratuity, once they complete a year's service: 21 days' basic pay for each of the first five years, then 30 days' for each year after, on the basic wage at the end of employment. With the employee's written consent, you can transfer it into the scheme instead, worked on the basic wage on the day of transfer. That ends your obligation for those years |
| Oman | You pay the Labour Law's gratuity when employment ends, or settle it under the Labour Law into the scheme or to the employee. It is worked out on basic pay at the date you settle it |
In Bahrain, those years are worked out on the last pay, so each raise reprices them until employment ends. In the DIFC and Oman, each raise reprices them until you settle them. Settling them into the scheme fixes them at the basic pay of the day you settle.
Know how and when the employee is paid
When employment ends, the fund pays the employee, not you. What they receive, and when, differs.
| Scheme | When they are paid | What they receive |
|---|---|---|
| Bahrain | When employment ends. SIO pays within five working days of the employee's application | The rule's amount for the years paid in for, worked on the last wage. It is paid up to what was paid in for them |
| The UAE's Savings Scheme | Within 14 days of employment ending | Everything you paid in, with its returns. They can keep it invested, or withdraw it at any time |
| The DIFC | When employment ends, or on another event the scheme's rules set | What was paid in, with any gain or loss. The investment risk is the employee's |
| Oman | When employment ends, unless they take another job in Oman within the period the Fund's regulation sets | What was paid in, with its returns. They can take it in one payment, or in yearly or monthly instalments |
Only Bahrain pays a set amount. The other three pay a balance, and what it comes to depends on what it earned. In the UAE's scheme, the choices run from a portfolio that guarantees the capital to portfolios with more risk, with Sharia-compliant funds among them.
In Bahrain, a move to another branch or establishment of the same employer is not the end of service. A new owner of the business carries on paying.
Follow seven years through each scheme
Take one employee with seven years' service, all of it in the scheme, on the same pay throughout. Here is what each scheme has taken in by the end, in months of the pay it is worked on, against the lump sum its rule gives for the same years. Investment returns are left out.
| Scheme | Paid in over seven years | The lump sum for the same years | Paid in, against the lump sum | What the employee receives |
|---|---|---|---|---|
| Bahrain | 5.54 months' pay | 5.5 months' pay, on the rule SIO pays | 100.8% | 5.5 months' pay, from SIO |
| The UAE's Savings Scheme | 5.5 months' basic pay | 5.5 months' basic pay, on the Labour Law's gratuity | 99.95% | What was paid in, with its returns |
| The DIFC | 5.5 months' basic pay | 5.42 months' basic pay, on the DIFC's own gratuity | 101.34% | What was paid in, with any gain or loss |
| Oman | 7.56 months' basic pay | 7 months' basic pay, on the Labour Law's minimum gratuity | 108% | What was paid in, with its returns |
On pay that never changes, the UAE's and the DIFC's rates take in almost exactly what the gratuity would have given. Bahrain's take in a little more, but SIO pays the rule's amount, so the employee receives 5.5 months' pay, not 5.54. Oman's single rate takes in more than the Labour Law's minimum.
Pay rarely stays the same for seven years. A raise is where the schemes part company.
Expect a raise to cost you more in Bahrain
A gratuity is worked out on the last pay, so a raise reprices every year served. A monthly scheme pays a share of each month's pay as it goes.
In Bahrain, SIO pays the rule's amount on the last wage, up to what was paid in. When a wage rises, you pay SIO the difference the raise makes to the end of service contributions. Where a wage falls, you can recover the difference when the benefit is paid.
In the DIFC, each month's payment is worked on that month's basic pay. The UAE's Savings Scheme and Oman's scheme are set as a share of the monthly basic pay too. A raise lifts the payment from the month it takes effect.
So a pay review costs different amounts in each place. In Bahrain, it brings a payment of the difference to SIO. In the other three, it changes the months to come. In Bahrain, the DIFC and Oman, the years before the scheme are still repriced until they are settled.
Pay each month by the scheme's own deadline
Each scheme adds a payment to the month, with its own date and its own steps.
| Scheme | Paid by | What else changes in payroll |
|---|---|---|
| Bahrain | With the month's SIO contributions, by the 15th of the next month | The rate moves to 8.4% once service with you passes three years, counting years before March 2024. Contributions paid on less than the real wage carry an additional 20% of what was not paid. Late ones carry interest of 5% for each month, or part of a month |
| The UAE's Savings Scheme | Into the fund within 15 days of the start of each month | The rate moves to 8.33% after five years' service. An employee may add their own contributions, up to 25% of their total wage |
| The DIFC | By the 21st of the next month | Each new employee is registered within two months, with payments back to their start. You may hold payments back during probation, then pay them back to the first day once employment is confirmed. The rate moves to 8.33% in the month of the five-year anniversary, split by day. An employee's own contributions are deducted from pay, where they ask in writing |
| Oman | On the dates the Fund's regulation sets | One rate, 9% of basic pay, whatever the service |
In Bahrain and the DIFC, the higher rate counts service from the employee's first day with you, before the scheme as well as since. In Bahrain, an employee with more than three years' service before March 2024 is paid in for at 8.4% from the scheme's start.
In the DIFC, a month's payment not made by its deadline is a breach the DIFC can fine. An arrangement that makes regular pay look discretionary, to keep basic pay down, is void.
Check who each scheme leaves out
Nationals sit outside most of these schemes, because their pension covers them.
In Bahrain, a Bahraini national builds up no end of service. Their SIO pension takes its place. A national of another Gulf country is outside the scheme, and covered by their own country's pension.
In the DIFC, an Emirati national or other Gulf national registered with GPSSA builds up no gratuity. Where your GPSSA contribution for them is less than the scheme's rate would be, you pay the difference into the scheme, where it comes to AED 1,000 a month or more.
In Oman, the scheme is compulsory for every non-Omani employee. An Omani national insured with the Fund may join by choice. So may an employer that chooses to pay savings for its people.
MOHRE's Savings Scheme covers the employees you choose to enrol. Those you leave out keep the Labour Law's gratuity.
Run each scheme's payment from the same record as the pay
Each scheme adds a payment to the month, on its own pay, rate step and deadline. The years before it still sit with you. Kept apart from payroll, the rate steps late, and the older years are forgotten until someone leaves.
On our payroll, Bahrain's end of service contribution for each expatriate comes from the same record as the rest of the month. Your entity pays SIO.
In the UAE, our engine works out the gratuity or DEWS for each expatriate. We keep your DIFC workforce apart from your establishments registered with MOHRE, so nothing is filed under a registration that does not exist.
When Oman's scheme starts, the change is in our engine before the run it affects. You are told what it does to your figures.
You approve each month's outputs before anything is delivered. Your entity pays each fund, and the gratuity for the years before it.
Common questions.
Does a monthly scheme end the gratuity for years already served?
Can the employee keep the money invested after leaving?
When does Oman's savings scheme start?
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